I’m not one for attempting to time investments, however 16 Could 2024 was an auspicious day for BT Group (LSE: BT.A) shares. On that day the share price climbed 17%. And with just a few wiggles alongside the way in which, it’s since saved on rising.

It was the day BT launched full-year outcomes for the fiscal 2024 yr. And £10,000 invested within the inventory the day earlier than would now be value £16,370 give or take just a few kilos.

The important thing turnaround occasion was summed up by CEO Allison Kirkby: “Having passed peak capex on our full fibre broadband rollout and achieved our £3bn cost and service transformation programme a year ahead of schedule, we’ve now reached the inflection point on our long-term strategy.”

Perspective

Lengthy-term traders have to see this in a wider context. The good points of the previous yr or so can have happy shareholders. However the BT share price remains to be greater than 60% down since its ranges of late 2015 earlier than practically a decade of rot set in.

So will the previous yr’s share price development translate into regular longer-term returns? On the headline valuation entrance, I believe BT nonetheless reveals enticing worth.

We’re taking a look at a forecast price-to-earnings (P/E) ratio of 12.5, which doesn’t appear demanding. However the P/E is a crude measure and doesn’t account for debt. Right here we’re taking a look at web debt approaching £20bn, at the same stage to BT’s market cap. It suggests an efficient P/E for the enterprise itself of round twice the headline determine. Hmm, perhaps not so low cost.

Nonetheless, debt is just one of three issues that turned me off BT for thus lengthy.

Sustainable dividend

One was my conviction that BT’s earlier dividend technique was destroying shareholder worth. It was paying an excessive amount of and the share price suffered because of this.

However because the dividend rebasing within the wake of the pandemic, I see it as extra sustainable now. Forecasts present dividends rising within the subsequent few years. And crucially, they need to be coated round 1.8 instances by projected earnings.

The ultimate factor that scared me was the dimensions of BT’s pension fund deficit. However the firm is chipping away at it, contributing £0.8bn within the 2024-25 yr. It decreased the deficit to £4.1bn by 31 March. And BT reckons it’s on monitor to get again to full funding by 2030.

Long run

Stepping again from funds, one key factor worries me as a long-term investor. BT is placing every part into fibre to the premises (FTTP) broadband. It’s technically complicated and expensive. And proper now I believe it’s in all probability precisely what BT ought to concentrate on.

However I fear a bit in regards to the eggs-to-baskets ratio. The telecoms panorama may be very completely different at the moment than from 20 years in the past. What’s going to the following 20 years convey?

Nonetheless, I may put that apart and purchase for the 4.4% forecast dividend yield if it wasn’t for the debt. So it’s not for me. However traders much less involved about debt funding may do nicely to contemplate BT.